In a few days American people will decide who will inhabit the White house for another four years in the 57th presidential election. The 18th National Congress of the Communist Party of China that will begin from November 8 will also decide the fate of the person who will reside in Zhongnanhai palace for one decade. Whoever will be elected or selected, they will have to face the most challenging time in the history of their relations.

In strategic terms America and China compete against each other, they fear each other and they fight each other in their economic policies relating each other and in almost all geo-strategic regions – prominently in East Asia, South East Asia, in Pacific, Middle East and in South Asia. Their tussle has continued in United Nations and other global forums.

China – US Relations

But the good thing is that the nature of global economy they entertained will not let them clash against each other to a level beyond some limit. Therefore they have limited options than forging a prudential relationship characterized by mutual trust and commitment in a turbulent time; when not bigger and powerful countries can fight and challenge them, but some poor and weak countries.

It is followed by some non state actors rising from some stateless regions of the world and with the power of terror that when coupled with modern technology can cause horrible damages to their people and their strategic infrastructures.
Therefore, politically they may be termed as foes but socially and economically they are partner for peace and their common prosperity. Consequently, “Multilateral Engagement with Bilateral Vigor” was the correct term used by Australian Prime Minister Kevin Rudd to explain his country’s strategy in dealing with China. During his meeting with U.S. Secretary of State Hillary Clinton on March 2009, he stated his strategy to integrate China in international community and invite it to take greater responsibility in world affairs. Clinton agreeing with him affirmed the U.S. desire for a successful China – that ensures rising standard of living for its people and improves democracy at a local level that is tolerable to its leaders. Indicating challenges posed by China’s rise and her country’s limitation, she asked Prime Minister Rudd “How do you deal toughly with your banker?”

Really, China has emerged as a banker of the world’s wealthiest country – United States. The Asian giant that has held some U.S. $ 3.2 trillion in its foreign reserve is the largest amount in the world. It is quite interesting to note that when China initiated economic reform in 1978 its foreign reserve was mere U.S. $ 2.2 billion. After this, the sharp rise continued. In 2001 it reached $212 billion. In 2006 it crossed 2 trillion and within a period of five years one more trillion. Obviously China has held 1.2 trillion in U.S. treasury bills, bank notes and bonds and that is said even larger than the amount owned by American households. In such a situation neither Obama nor Romney could ignore the vital truth.

Naturally, this has given China a great leverage over America and emboldened by this Chinese media at times ask its government to use its huge reserve as weapon against the United States for the strategic and political differences between them.

1. Great Departures and Great Challenges

About 50 years ago, China was a country where tens of millions used to go hungry in bed, but now it is the second largest economy where the largest number of billionaires proudly live and work. In the meanwhile it is also predicted that some times within the next two decades it will become the largest economy, will have completely eradicated poverty in its territory and will become the technological powerhouse of the world.

The Chinese have demonstrated that they have the quality, competence, confidence, commitment and resources to achieve it. President Hu Jintao, who is expected to step-down from the General Secretary of Chinese Communist Party after the National Congress and from the presidency in early next year, has leaded his country during the second phase of the glorious journey when China rose from middle ranked power to a global power only next to United States. And the level of recognition and global attention China receives is revealed by the mere fact that for some years it is almost impossible for any media to miss China in any of their publication – from news to editorials, in depth news analysis and researches. Educational institutes, think tanks and research bodies also have followed the same.

And the man expected to lead the next phase of its glorious national history is Xi Jinping as the party head and President. The man who as the Prime Minister will assist Xi in achieving that aim is Li Keqiang, a popular figure among the Chinese.

According to Ezra F. Vogel in 1978, when Deng Xiaoping and several other high ranking officials returned from foreign trips, summarizing the effects of these visits Deng made a revealing observation “The more we see , the more we realize how backward we are”. Further he remarked that “many of our ways of doing things are inappropriate and that we need to change” and China must embark on a new path.

Under the guidance of Deng, Gu Mu -the senior Chinese Vice Premier led a high level delegation to France, Switzerland, Germany, Denmark and Belgium from May 2 to June 6, 1978. The team was to make a study tour on various sectors of economy in those countries and recommend the needed reforms and policy change to the Chinese government.

Perhaps no visit in the contemporary world carried so much import and impact than this one in terms of global economic development. After the visit they took several weeks to prepare the reports, then for months – starting from 3. P.M. to 11 P.M., it was debriefed among the top leadership. Then it was followed by a planning meeting that lasted for another two months in regular morning sessions where the sixty top officials responsible in all aspects of economic development including senior most leadership including the party Chairman and Prime Minister Hua Guofeng participated with unusual enthusiasm and commitment.

In its closing session, on September 9, 1978 Li Xiannian – one of the most influential elder Statesman with overall responsibility of economy who later became President of China, announced the beginning of new age of openness . According to Vogel Li explained the situation for China most favorable and called for importing foreign technologies, equipment, and capital and management experiences to accelerate economic development. During GU Mu’s historic visit, a group of Europeans extended a proposal to lend as much as U.S. $ 20 billion to China and this was the greatest surprise offer for the delegation. The rest is history and now the country that never conceal a mood of jubilation when it was offered with a $ 20 billion loan, is now the biggest lender of the world.

2. From Unilinear to Multilinear Path to deal with a strategic rival and prosperity partner

The whole world is looking eagerly and in some sense impatiently how these two global economic and military giant will define their relations in one of the most turbulent time in human history. The challenges they were adapted to meet along the long history were unilinear, but now it has got a multilinear path.

About one week earlier of Xi’s elevation to the all powerful post of Chinese Communist party, when American voters will have chosen their next president – the first challenge he has to cope with will be to initiate bigger policy strides to continue to become the world’s number one economic and military power or hand over the baton to China.

Obviously this will give a deep stimulation to some 2 thousands delegates and its leadership of the National Congress of Chinese Communist Party to define their strategic policy against the lone superpower that they aspire to leave behind them during the Xi’s tenure as the President and party leader.

China enjoys a special privilege. Although a country of thousands years of history with much glorious past, China considers itself as a young nation that was carved out of a communist revolution in 1949. Therefore, it has broken its relation with its past and Prime Minister of China for about two and half decades – Zhao En Lai, the mythically hardworking and one of the greatest administrator of 20th century told Henry Kissinger during a meeting that while United States had a history of 200 years, China was just 22 years old. They did not want to look the world in historical perspectives and abide by it if it demanded some accountability. This would give them a special prerogative to reject their history if it means some responsibility, and acknowledge it – if it helps their cause. And prudently and cleverly they are doing both. This has given them bigger diplomatic and strategic leverage to initiate greater departures and are exchange every impossible into possible and lucrative.

Closer U.S. – China – relations during Cold War era was the greatest strategic necessity of both countries. The strategic map that was groomed out of the mental atlas of the leaders of both countries prepared the psychological base for the disintegration of Soviet Union, and bag the unlimited pride, power and prosperity for both of them. But it has also opened new horizon of trickiest and delicate challenges – dealing with a strategic rival and prosperity partner –demanding a new diplomatic skills and competency. Even though they want to fight, even though they have power to fight and have reasons to fight, they cannot do it because they know the striking capability of their fire power but they do not know who will suffer more- themselves or the rival.

United States was China’s declared enemy since the early days of communist rule in China since October 1949 to U.S. president Richard M Nixon’s historic visit on February 1972.They also had fought a war in Korea in 1950. But one of the poorest countries with world’s largest population carried no strategic meaning with any amount of hostility towards America.

But highly confident, economically strong and powerful with modern armed forces equipped with advanced nuclear weapons, far-reaching ballistic missiles, strong blue water navy supported by air craft carrier and superior space program through all diplomatic overtures poses serious strategic threat to United States and the global system led by it. Chinese officials have also expressed their desire to replace dollar as the reserve currency and have initiated a new global development bank to challenge the U.S. dominated World Bank. All this have created overriding concern for United States.

Mr. Xi Jinping’s visit to United States in February this year was a fine initiation in assuring United States on China’s strategic intentions. Exhibiting some superior diplomatic skills he met all those who had played historical role in improving China’s relations with United States and expressed his deep respects to them. Immediately after his arrival he took part in a meeting with former Secretaries of State Henry Kissinger and Madeleine Albright, former national-security advisers Zbigniew Brzezinski, Brent Scowcroft and Sandy Berger including former Treasury Secretary Henry Paulson. With exceptional humility he expressed them that “their wise and practical suggestions have provided me with much food for thought”.

Vice President Xi knowing well that how Deng Xiaoping is popular in United States expressed his honor to Deng by citing his famous quote “Cross the river by feeling the stones”. Also quoting Hillary Clinton – “When confronted by mountains, one finds a way through, when blocked by a river, one finds a way to bridge to the other side”, he made best efforts to define China – U.S relations with insistence that how the world’s largest developing country should and will have a new type of cooperative partnership with “the largest developed country with great and far-reaching significance”.

Moreover, Vice president Xi did not want to conceal his differences with America. In a written interview with the Washington Post just before his U.S. visit, he had agreed that both their countries have “converging interests in the Asia-Pacific region than in anywhere else”. Indicating the U.S. military presence in Asia Pacific Xi had said that “At a time when people long for peace, stability and development, to deliberately give prominence to the military security agenda, scale up military deployment” and strengthen defense alliances is not the things that most countries in the region really hope to see.

Obviously the high level meeting between the world’s two most powerful countries with two largest economies had to cope with frictions and many challenges. Xi was also greeted by tough Congress members and protesters from Tibetan and Uighur activist including people associated with democratic and some spiritual movements in China. But Xi accompanied by 200 member strong delegates, in a polite and pleasing way tried to reassert Chinese positions from trade to human right situations including their mutual strategic interests.

It provided Xi an excellent opportunity to affirm his authority and test his knowledge skills needed to handle tricky international relations as well. His long hours meeting with US Vice President Joe Biden and Congress members, business leaders and civil society delegates had worked as a rare chance for the United States to know about a man who will take charge of the country that will define the international politics and economy in the next decade .Xi’s U.S. visit was preceded by Joe Biden’s visit to China while he had more than enough time to know about Xi expected to join the top job soon.

The United States too took Xi’s visit as one of the most important visit of any Chinese leader. Xi’s first meeting with Barrack Obama in his Oval office during the visit offered him an excellent opportunity to take stock of each other’s positions on vital issues governing their countries.

President Obama while greeting Xi Jinping did not miss to import his mind that a peaceful strong and prosperous China will critically be helpful in bringing stability and prosperity to the region and to the world.

Obama also asserted that China’s expanding power and prosperity also comes with increased responsibilities. Further expressing his areas of disagreements with China, he said that as they “want to work with China” this demands everybody working -“by the same rules of the road when it comes to the world economic system”. He also raised the Human Rights situation in China, however the focus of his speech was that “a strong working relationship” with China is critically important to the United States to bring and ensure stability, order, and security “that ultimately provides a better life for both the people of the United States and the people of China”.

United States, acknowledging the status and position of Xi – as future Chinese leader, showered an exceptional diplomatic honor that was followed by a 19 gun salute at Pentagon — the first such honor extended to a visiting vice president.

4. Challenges to Bilateral relations or Historical Opportunities for Global Peace and Development

According to Hu Angang one of the great events of the past decades has been the rapid rise of China’s obvious “quick ascent into the ranks of great powers” that outstripped the expectations of international community and of the Chinese government as well. And the economic pragmatism, political consistency and strategic vision of its great leader Deng Xiaoping caused its continuous rise in spite of its political system, strategic location and population challenges.

The exponential rise of Chinese power has indubitably overturned the global balance of power. Because of their differences over political values governing their relations numerous confusing and threatening zone have emerged including : North Korean nuclear ambition, peaceful resolution of Taiwan, U.S. military presence in East Asia, peaceful settlement of China’s land and maritime disputes with its neighbors and ensuring free merchandise in international waters in China’s vicinity.

This was followed by two other major diplomatic developments in U.S. – China relations. The first one was the Obama’s ‘Asia Pivot’ theory announced in Hawaii in last November to refocus integrated U.S. foreign , defense, and economic strategy extending from South Asia to North East and South East Asia. And the other was the joint Sino- Russian stand on Syria and Iran. Both these developments have been widely regarded as their common obsession leading towards conflicting global ambition straining their relations.

Therefore as mentioned above growth of China’s power in an exponential proportion has yet to reconcile with creation of modern institutions and rules to govern and manage the power it has acquired through great economic success. Its monolithic communist party structure still in total control of state affairs including its worldwide strategic and economic interest, if fails to deliver appropriate institutions and rule based governance to look after its major interests and growing ambitions of its populace, China may not sustain its overbearing mass of power.

Any U.S. administration does not want to be seemed sluggish in promoting and protecting its core values and major national interests, but a powerful China is a great reality and U.S. has no other options than to build a better modality to live and work with China and devise proper policy to deal intensively with China in all areas of its interactions and reflect objectively it in its strategic behavior.

Obviously,China’s success and strategic intentions as stated by Elizabeth C Economy has bred new challenges for its foreign policy in negotiating its economic and security interests with global community which up to now has failed to keep pace with the growing demands of international community. According to Dr. Economy China needs to update and reset its foreign policy strategy as a rising power status that demands more accountability and balance in its regional and global ambition.

But when people are meant, when peace and development implies, relations between countries can not be defined in strategic and military terms only. And the economic policy China has adopted the social practices China has developed and the history it has shaped since the late 70s would inevitably led China closer to United States although their political relations between them will likely to be strained for the time being.

Keshav Prasad Bhattarai is the former President of Nepal Teachers’ Association,Teachers’ Union of Nepal and General Secretary of SAARC Teachers’ Federation.

He writes for Eurasia Review. Earlier he worked as a columnist in an English language weekly from Nepal – ‘The Reporter’ and Rajdhani – a Nepali language daily. Before that as a freelancer, he wrote for different Nepali newspapers.

For his long association with national and international trade union movement, he usually prepares concept papers on educational issues, economic development, trade union movement and democratic development for different organizations in Nepal from the perspective of teachers’ trade union but in a critical way.

Keshav Prasad Bhattarai has also authored three books -- two of them are about Nepal's Relations with India and one on educational issues.

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